As another one of the negative twists in the nearly four-year-old saga of Pacific Gas and Electric Co. (PG&E) and the fatal September 2010 natural gas transmission pipeline rupture in San Bruno, CA, the consumer watchdog The Utility Reform Network (TURN) on Tuesday charged both the utility and state regulators with malfeasance in handling the aftermath of the tragedy.

TURN officials demanded that the California Public Utilities Commission (CPUC) sanction PG&E for allegedly violating the regulatory agency's ex parte rules. In addition, they asked for long-time CPUC President Michael Peevey to be disqualified from the ongoing penalty phase investigation of the San Bruno case because he participated in improper contacts with the utility.

Elected officials in the City of San Bruno and the state legislature have been critical of the CPUC generally and Peevey, in particular, for having "too cozy" to relationship with PG&E and other investor-owned companies that they oversee (see Daily GPI, June 7, 2013).

TURN said its request Tuesday supports previous motions made by San Bruno officials for sanctioning the San Francisco-based utility and recusing Peevey, who has headed the state regulatory commission for more than a decade under three different governors (see Daily GPI, Feb. 5).

TURN's top attorney Tom Long urged the CPUC to "finally stand up to PG&E and sanction the company for a series of e-mails in which [the utility] went outside of the legal process in back-door communications with Peevey, his chief advisors and other staff about PG&E's financial position and remedial work on its mismanaged pipelines.

"Substantive communications like these on key issues in the [San Bruno penalty phase] proceeding are precisely the type of communications that the commission's ex parte rules do not permit," Long said.

TURN also wants Peevey dropped from participating in deciding if PG&E is penalized up to $2.25 billion for its failures before, during and after the San Bruno incident in which eight people were killed and a substantial part of the town destroyed (see Daily GPI, Dec. 26, 2013), alleging his back-door communications with PG&E give the appearance of bias.

"President Peevey's leadership has been compromised from the beginning," said TURN Executive Director Mark Toney. "The public is tired of the CPUC's cozy relationship with PG&E."

Toney cited "affectionate e-mails" between Peevey's office and top executives at PG&E regarding the oversight of the utility since San Bruno pipeline explosion and fire happened.

A proposed decision on the potential penalty from two CPUC administrative law judges is expected in the next two months.

West Coast Correspondent | Los Angeles, CARichard Nemec began writing for NGI in 1995 and has 30 years experience in the energy industry. He holds BA from the University of Southern California, Los Angeles; and a MA in journalism from Northwestern University, Evanston, IL; and completed MBA courses at Northwestern's Evening Graduate School of Management.
rich.nemec@naturalgasintel.com

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